Dear Experts
We are the manufacturer of liquid chemical and due to shortage of tankers in market ,we have made own 5-6 tankers to deliver the material to our party. Mostly we are supplying our material to govt/semi Govt. Units. According to Purchase order we are charging freight and raising freight invoice separately with the material invoice .
So we booked the transportation income in our balance sheet . Now Excise audit team audited our account and raising a quarry that transportation income is a part of your goods value and excise duty will be payable @12.36 % on Transportation income .
Please advice on this issue .
Freight Charges Excluded from Excise Duty Assessable Value; Legal Precedents Confirm Transportation Costs Not Included A manufacturer of liquid chemicals, facing a shortage of tankers, used their own tankers to deliver materials and charged freight separately from the material invoice. During an excise audit, it was questioned whether the transportation income should be included in the goods' value for excise duty purposes. An expert advised that according to legal precedents, freight charges should not be included in the assessable value for excise duty. Previous court rulings support that transportation costs, even if charged separately or with profit, are not part of the assessable value, thus excise duty is not applicable on such charges. (AI Summary)
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